President Barack Obama will veto GOP 'Plan B' if it reaches his desk

WASHINGTON -- President Obama would veto a proposed GOP bill that would raise tax rates for Americans making more than $1 million if it reaches his desk, a senior White House aide said this morning.

The announcement comes one day after House Speaker John Boehner floated his so-called "Plan B" legislation to avert tax hikes for most Americans set to go into effect at the beginning of next year.

"The American people have been clear that they will not accept an economic approach that places too big of a burden on the middle class, seniors, students and the most vulnerable Americans while asking too little of the wealthiest Americans," White House communications director Dan Pfeiffer said in a statement. "The deficit reduction is minimal, and perversely, given its authors, solely through tax increases with no spending cuts. This approach does not meet the test of balance, and the president would veto the legislation in the unlikely event of its passage."

Brendan Buck, a spokesman for Boehner, called the veto threat "bizarre and irrational."

"Republicans have always said a broader, 'balanced' plan is the ideal solution, and we have put one forward," Buck said. "In the absence of a 'balanced' solution from the president, however, we must act to stop taxes from rising across the board in 12 days."

The latest back-and-forth comes as negotiations on tax rates and the looming "fiscal cliff" appear to have slowed, if not ground to a halt.

Senior administration officials said discussion about a major agreement have virtually stopped since Boehner proposed his Plan B, despite the fact it has virtually no chance of passing the Senate. They noted that Obama submitted a plan to the speaker on Monday, and they are awaiting a response.

Officials said the is scheduled to leave for his end-of-the-year vacation in Hawaii on Friday, but he will stay in Washington if fiscal cliff issues are left hanging.

Pfeiffer said the Boehner plan would give millionaires a tax break of $50,000. The Boehner plan also would result in unemployment assistance being cut off for some 2 million Americans who have been taking advantage of extended benefits.

The veto threat is not unexpected. Senate Majority Leader Harry Reid said on Tuesday that the Democratic-controlled Senate would not consider Boehner's plan and White House spokesman Jay Carney said it did little to address long-term fiscal challenges.

Obama's latest proposal included extending George W. Bush era rates - set to expire on Jan. 1 - for couples making $400,000 or less, a change from his campaign pledge to allow those rates to expire on those making more than $250,000. The Obama offer also included $1.2 trillion in spending cuts over the next decade. Boehner rejected that offer, saying a significant portion of the cuts came through budgetary gimmicks.

"Obama has put forward a proposal that meets the speaker halfway on both taxes and spending, offering to work with Republicans to cut spending by ... more than $1 trillion beyond what he has already signed into law," Pfeiffer said. "The president urges the Republican leadership to work with us to resolve remaining differences and find a reasonable solution to this situation today instead of engaging in political exercises that increase the possibility that taxes go up on every American."

An economic analysis prepared by the White House also concludes that the Boehner plan would actually benefit many millionaires because of favorable provisions on estate taxes, personal exemptions and itemized deductions. The administration said the plan would provide an average of $50,000 in tax benefits for people who make more than $1 million, when compared with the plan Obama has proposed.

Many middle class families, meanwhile, would see tax bills rise as much as $1,000 under the Boehner plan. It ends tax breaks that benefit the middle class, including the Child Tax Credit and Earned Income Tax Credit.

Overall, the administration said Plan B would raise only about $300 billion from high-income households, less than a third of what Boehner proposed in his last offer to Obama.

Republicans may move forward with a pair of votes on Thursday, one to maintain existing tax rates for those earning less than $250,000 per year and the Boehner alternative.

USA Today